Capitalist Corner

April 21, 2005

There Are Honest Libertarians -- Right?

On assignment from political theory class, I've been reading David Boaz's Libertarianism: A Primer. Boaz is the Executive VP of CATO and the sort of guy who finds an idea and crams the world into it. Since I've had to follow him along in his quest to make every historical occurrence, mistake and misstep an argument for free markets and weak states, I figure the least I can do is is highlight some of the stranger parts. So here are my favorite two from the first chapter, which is about why Libertarianism is just about the sweetest thing ever:

First, we are not as prosperous as we could be. If our economy were growing at the rate it grew from 1943 to 1973, our GDP would be 40 percent larger than it is.

In case you're curious, 1943-1977 encompasses the end of FDR's presidency, Harry Truman, Dwight Eisenhower, John F. Kennedy, Lyndon B. Johnson, and Richard Nixon. So if our economy were growing at the rate it did during liberalism's renaissance, this country would be better off.

I'm genuinely confused, actually, as to how Boaz thought reference to the days of the New Deal, the GI Bill, the WW II build-up, and Keynesian economics would help the case for libertarianism, but I guess he figured no one would notice and they'd just assume the slowdown since came thanks to big government. That, of course, is insane -- In 1973, the year Boaz stops our growth at, OPEC caused a massive oil crisis, quadrupling the price per barrel of our economy's fuel. In response, Carter deregulated, then came Reagan, the closest thing we've had to libertarian, and then Bush 41, and then a roaring economy under a Democrat. Boaz is either the worst or most disingenuous historian I've ever read. That he tries to blame all this on a larger and more complicated tax code is either laughably cynical or remarkably insane.

Great Britain, which had higher taxes and more socialism than the United States, suffered even more. It was the richest country in the world in the nineteenth century, but by the 1970's its economic stagnation and national malaise were known worldwide as the "British disease".

Boaz has now managed to track Britain's trajectory from preeminent world power to underperforming economy without managing to mention the end of imperialism, World War I, or World War II. Bravo, good sir, a virtuoso performance indeed!

Comments

So he is saying that the Reagan 'supply-side' policies lowered economic growth. Now that is HONEST for a Libertarian!

Posted by: pgl | Apr 21, 2005 5:10:46 PM

Typical of know-nothing Republican economics. They really, really have no idea what they're talking about.

Posted by: Marshall | Apr 21, 2005 5:31:57 PM

the sort of guy who finds an idea and crams the world into it

Isn't that almost the definition of libertarianism?

And a "libertarian historian" has to be some kind of philosophical paradox, because libertarianism is the most ahistorical political ideology there is. Libertarianism can only be accepted if one suspends any knowledge of history, provided you knew any to begin with.

So if we want to be the richest country in the world, we should be a constitutional monarchy?

Posted by: bunny | Apr 21, 2005 8:05:37 PM

Wasn't 1943 during WWII? Weren't marginal tax rates something like 90% for income and 45% for capital gains? I did tax work back in the 1960s, and there were still incredible marginal tax rates. If I remember correctly, Nixon cut taxes in the 70s to help the economy, of all things.

If you look at history, high taxes mean high growth. WWI meant high taxes and that fed the 1920s boom. The 1926 tax cut led to the Great Depression. WWII meant high taxes and that led to high growth. It's only when anti-business types start demanding and getting tax cuts that the economy goes stagnant or tanks.

I am baffled. How can any libertarian say that the 40 Golden Years were a free-marketeers dream? This was the era of economic regulation and socialism (in Europe). Why doesn't he point to the economic collapse of the 1930s or 1890s as proof of the evils of socialism? It makes just about as much sense.

If anything, the British decline starts in the late nineteenth century, when Germany, in particular, but also the US and France, I think, started to produce a lot more manufactured goods for export. Ironically, Britain was about as free-trade as you can get, whilst Prussian corporatism was the big thing in Germany.

I'm a Californian transplanted to DC, and surprisingly at peace with it. Or at least I was till it started getting colder. Job-wise, I'm the staff writer for The American Prospect. In the past, I've written for the Washington Monthly, the LA Weekly, The LA Times, The New Republic, Slate, The New York Sun, and the Gadflyer. I'm a damn good cook. No, really. Want to know more? E-mail, I'm friendly.